Use of AI by Asset Managers

Why It Matters

AI can reshape investment decisions, but unmanaged risks threaten market stability and investor confidence, making regulatory oversight essential for the sector’s integrity.

Key Takeaways

• 53% of Dutch asset managers using or planning AI soon
• Larger fund managers and proprietary traders lead AI adoption
• 26% lack any AI policy; 35% lack technical controls
• 72% unprepared for generative AI risks
• AFM calls for transparent, ethical AI governance and documentation

Pulse Analysis

AI is rapidly becoming a core tool in asset management, driven by the promise of faster data processing, pattern recognition, and automated decision‑making. While global peers have already integrated machine‑learning models into portfolio construction, the AFM’s latest survey reveals that the Dutch market is catching up, with more than half of institutions either deploying AI today or planning rollout within twelve months. Larger fund managers and proprietary traders are at the forefront, leveraging sophisticated algorithms to gain competitive edges in trade execution and risk assessment.

The AFM’s findings also highlight a significant governance gap. Over a quarter of firms operate without a formal AI policy, and more than a third lack the technical or procedural safeguards needed to monitor model behavior. The generative‑AI surge amplifies these concerns, as 72% of respondents admit they are ill‑equipped to manage associated risks such as model hallucination, data bias, or regulatory non‑compliance. The regulator stresses that existing rules on controlled and ethical business conduct apply equally to AI, urging firms to document model decisions, assign clear responsibilities, and adopt ethical handbooks that address AI‑specific challenges.

For the industry, the AFM’s stance signals a shift from optional innovation to mandatory risk stewardship. Asset managers that proactively embed transparency, robust controls, and ethical frameworks will not only avoid regulatory penalties but also enhance investor trust and operational resilience. As AI capabilities evolve, ongoing supervisory focus will likely tighten, prompting firms to integrate continuous monitoring, third‑party audits, and cross‑functional AI oversight into their core governance structures. Those that adapt swiftly stand to capture the efficiency gains of AI while safeguarding the integrity of the Dutch financial market.